A few weeks ago, TechCrunch broke the news that Akamai was in talks to acquire API security specialist Noname Security for about $500 million. Today, the deal was confirmed, albeit at a slightly lower price. Akamai announced Tuesday that it has agreed to acquire Noname in a $450 million deal.
This agreement highlights continued efforts towards further consolidation in the cybersecurity market. Over the past few years, various cybersecurity startups have emerged. However, many of these companies find it difficult to scale, raise capital, or sell to customers looking for a one-stop shop to manage multiple security needs. As a result, major companies select smaller, more promising companies from among these companies.
In some cases, significant discounts may be available. Noname was valued at $1 billion in its last private financing in December 2021, so it will sell for less than half that price.
However, this is not even the worst discount. Wiz was in advanced negotiations to acquire Lacework Security for his $168 million, slightly lower than his previous valuation of the small company at $8.3 billion. However, the deal fell through due diligence.
Akamai said it plans to integrate Noname into its API security business and expects the acquisition to generate approximately $20 million in revenue in fiscal 2024.
“Our world is powered by applications, and as applications and users proliferate, so do security risks,” Mani Sundaram, vice president and general manager of the Security Technology Group at Akamai Technologies, said in a statement. I am. “Akamai recognizes the growing need for API protection, with our own data showing a 109% year-over-year increase in API attacks. With the addition of Noname, Akamai We believe this provides the broad range of integration and deployment options needed to provide comprehensive API protection.”
The company said Akamai is focused on giving developers and security operations teams more tools to discover “shadow” APIs and other vulnerabilities.
The transaction is expected to close in the second quarter of 2024.
“API development continues to proliferate as customers prioritize investments in application modernization and digital transformation initiatives,” Noname CEO and co-founder Oz Golan said in a statement. . “The combination of Noname and Akamai's API Security service allows us to provide solutions for all types of customers, whether their applications reside in the cloud, native edge, on-premises, or on another vendor's platform. Your application will be protected no matter what.
Mr. Golan and the remaining 200 employees of the San Jose company will join Akamai as part of the deal.